United States v. Joseph Loftis
843 F.3d 1173
| 9th Cir. | 2016Background
- Defendant Joseph Brent Loftis indicted on five counts of wire fraud alleging a multi-year, multi-state scheme to defraud investors by misrepresenting an oil business; the five charged transactions involved three investors and occurred in Montana.
- Before trial the government sought to introduce evidence of additional investor victims, additional wire uses, and out-of-state conduct (uncharged transactions).
- Loftis moved in limine to exclude the uncharged-transaction evidence and to limit proof to the three named investors and Montana conduct.
- The district court granted the motion in part, treating the proffered evidence as "other wire frauds" potentially subject to Rule 404(b) unless shown inextricably intertwined or otherwise admissible under Rule 404(b).
- The government appealed the interlocutory ruling; this Court exercised § 3731 jurisdiction and reviewed whether the uncharged transactions are "other" acts under Rule 404(b).
Issues
| Issue | Plaintiff's Argument (Government) | Defendant's Argument (Loftis) | Held |
|---|---|---|---|
| Whether evidence of uncharged transactions is "other crimes" under Rule 404(b) | Evidence of additional wire uses and victims is admissible as part of the overall scheme to defraud (proves the scheme element) | Limit proof to the three named investors and Montana; exclude other victims and out-of-state acts as impermissible "other acts" | Held: Uncharged transactions that are part of the fraudulent scheme are not "other" acts under Rule 404(b) and may be offered to prove the scheme element |
| Whether the government must invoke the inextricably intertwined doctrine to admit the evidence | Not necessary when the uncharged acts are part of the charged scheme; alternatively, inextricably intertwined doctrine also applies | Argued the court should exclude unless government proves inextricably intertwined | Held: Inextricably intertwined doctrine also supports admissibility when warranted, but is not required if evidence is part of the charged crime |
| Scope of wire-fraud elements relevant to admissibility | The scheme element of wire fraud includes the overall fraudulent scheme and additional executions not specifically charged | Narrow view: admissibility limited to the specifically charged wire transfers/investors | Held: Wire-fraud elements encompass the overall scheme, including additional executions; thus related uncharged transactions can be evidence of the charged offense |
| Whether the district court misapplied the law in its in-limine ruling | Government urged reversal of an order treating the evidence as "other wire frauds" presumptively subject to 404(b) | Loftis defended the court's precautionary 404(b) framing | Held: Although the district court’s order contained some ambiguity, it was not construed to conflict with the appellate holding and the order is affirmed; the opinion does not decide other exclusions (e.g., Rule 403) |
Key Cases Cited
- United States v. Lo, 839 F.3d 777 (9th Cir. 2016) (wire/mail fraud conviction may include the fraudulent scheme as a whole, including uncharged executions)
- United States v. Parks, 285 F.3d 1133 (9th Cir. 2002) (standard of review and whether evidence is "other crimes" reviewed de novo)
- United States v. Smith, 685 F.2d 1293 (11th Cir. 1982) (uncharged fraudulent claims admissible to demonstrate existence of fraudulent scheme)
- United States v. Swinton, 75 F.3d 374 (8th Cir. 1996) (uncharged transactions that prove an overall scheme are not "other acts" under Rule 404(b))
- United States v. Mundi, 892 F.2d 817 (9th Cir. 1989) (uncharged incidents in the same scheme are inextricably intertwined and admissible)
- United States v. Sayakhom, 186 F.3d 928 (9th Cir. 1999) (related business entities used to continue a scheme were part of the ongoing scheme and not subject to exclusion under Rule 404(b))